DOJ Reverses its Position on Class Waiver.

robibaishnab , June 19, 2017

The National Labor Relations Act (“NLRA”) was enacted in 1935 to “to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices.”[1] The Federal Arbitration Act (“FAA”) was enacted in 1925 to encourage private dispute resolution through arbitration.[2] Whether two federal statutes can live in harmony or conflict is often a thing of heated legal debate.

Currently before the Supreme Court of the United States (“SCOTUS”) are three consolidated cases that may put to rest a circuit split, deciding whether arbitration agreements that prohibit employees from joining other employees to pursue worked-related claims, including claims for unpaid minimum wages or unpaid overtime, violate the NLRA.[3] In a rare position reversal, the U.S. Department of Justice filed an amicus brief in which it now supports class waiver by arbitration agreements.

While not among the consolidated cases before the SCOTUS, the Sixth Circuit recently supported workers’ rights, holding that the NLRA does not conflict with the FAA, and since the NLRA creates a substantive, nonwaivable right to engage in concerted activity, arbitration agreements that prohibit concerted activities in any forum are unenforceable.[4] It is important to note that the Sixth Circuit does not say that an arbitration agreement cannot require collective or class claims to be brought in arbitration. Rather, the Sixth Circuit says that an arbitration agreement cannot prohibit an employee from pursuing collective claims, class claims or any other concerted activity in all forums. It is an arbitration agreement’s prohibition against concerted activity that violates the NLRA, not the arbitration agreement’s requirement to arbitrate.

Of course, disagreement on this issue is what the SCOTUS will decide. While the DOL’s shift certainly does not bode well for workers, we are hopeful that the legal arguments presented by the Sixth, Seventh and Ninth Circuits prevail. The power balance between workers and historically more powerful employers is facilitated by workers’ rights to join their individually insignificant damages and resources into collectives.

If you feel that you are not being properly paid wages you’ve earned, and if you think you have no recourse because you signed an arbitration agreement; you should call us for a free consultation. You may have a viable claim in court or in arbitration, and we can help you determine the best course of action after thorough consideration of your situation.